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Has Tony Abbott gone mad?

Paul Sheehan

Is Tony Abbott mad? Or is he brave? Or crazy-brave? On the eve of the day that could permanently define or debilitate his authority as Prime Minister, these questions come to mind given the conflicting signals in the lead-up to his first budget.

Abbott would not be the first recent leader to have his clinical fitness questioned. Mark Latham was defined by anger-management issues. Malcolm Turnbull was described as a narcissist by his predecessor as leader. Kevin Rudd was described as “mad” even by former members of his own cabinet.

A strong case can be made for Abbott’s political insanity, as distinct from any petulant speculation about his clinical sanity, a game which has already worn thin. A strong case can also be made for his political bravery.

First, insanity. Few leaders in modern Australian politics have more effectively refined and repeated the drum-beat of a simple message, hammered home, than Abbott as leader and Mark Textor as pollster. Their message: Julia Gillard misled the nation. Her carbon tax was a big new tax. It would damage the economy. Abbott, in contrast, would introduce no new taxes and no surprises (other than a tax imposed on large companies to pay for paid parental leave). There would be a return to steady, prudent, predictable government.

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The latitude for hypocrisy contained in this simple moral message was zero. Now, nine months after the 2013 federal election campaign, the Abbott government, based on multiple clues, will introduce a tax increase on fuel, a new tax on every visit to the doctor, higher costs for university, an increase in the income tax for the 650,000 people earning in excess of $150,000 – or perhaps the threshold will be higher (the agony over this broken promise ebbed and flowed and wobbled, right to the end).

So there goes the no new taxes. There goes no unpleasant surprises. The other dishonesty from the Coalition was to pretend the increase in budget deficits was caused by profligate spending, not by a combination of stimulus spending and a fall in receipts from the resources boom and a hit to confidence caused by the global financial crisis in 2008-09.

Add to broken promises a big dash of political bravado: increasing the eligibility age for the pension to 70, phased in by 2035, plus increasing the cost of university, and the cost of health care, plus increasing the eligibility threshold for family benefits and disability support payments and the age pension. Plenty of potential for electoral blowback in all that.

To compound the broken promises, the regressive tax hits, the false economy on doctors visits (early detection being the cheapest form of health care), and the plethora of cuts to government agencies, the biggest luxury of all, Abbott’s paid parental leave scheme, is not sacrificed even as the prime minister calls for sacrifice.

Crazy. Little wonder the opinion polls are showing a sharp deterioration in support for the Coalition.

Or crazy brave? Whatever you may think of Abbott, he is willing to accept the arrows and opprobrium that will surely come his way, perhaps even at the cost of his job in due course. He will do so because he believes it will be for the greater good, a stronger economy, healthier growth in job creation, and raise the overall productivity, participation and prosperity of women via parental leave.

To buttress the case for bravery I turn to Tony Shepherd, who chaired the National Commission of Audit on federal expenditures and income. Last week he spoke at the Centre for Independent Studies and I also had the chance to talk to him after his talk.

Asked about the contrast between Abbott’s no-surprises campaign rhetoric and the reality of a structural budget deficit – with Commonwealth spending at 26 per cent of GDP while its receipts are 23.1 per cent of GDP, a gap that would see federal debt and deficit blow out to European proportions if sustained – Shepherd replied:

“They did make one iron-clad promise: to return the budget to a sustainable surplus. And in my view that trumps all.

“I think it is something the average Australian would like their government to do … The house is not on fire but if we have another decade of deficits … ” He let that sentence trail off. He believes the Abbott government is betting that the average household understands that life is more precarious when the cost of high debt weighs down on income, and this also applies to governments.

“There is no such thing as government money; it is our money,” Shepherd said. Previous generations of Australians, and most previous governments, have acted on an implicit social compact of generational fairness, and not pushed their cost of living onto future generations.

“On page two of our report we say that every vested interest will say that this is unfair,” he said. “My response is, ‘You want everyone else to suffer, not yourself’.”

He did not accept criticisms that the commission of audit – and by implication the likely federal budget – place too much responsibility on the poor to cut costs. “We certainly tried to protect the lowest 20 per cent. We’ve tried to look after them. Many of our recommendations hit high-income earners and business.”

Whether Abbott is the mad monk his critics portray, or the man who became Prime Minister because he had guts, will be borne out by the big bet he has made. Like all prime ministers who introduce an austerity budget he is betting that a majority of the electorate will see that hard decisions on the economy, with its ageing population, need to be made, and made now, and to act otherwise is the greater hypocrisy.

534 comments so far

You call it 'bravery'. I call it ideological fanaticism. He blatantly lied to the electorate, treated them like morons, blasted Gillard for her 'broken promises', won his election and maintained that it is his ticket of leave to fulfill his ideological ambition. You say he doesn't need to keep any promises because, gee, any idiot could see that we need a fix and need it now, and if anyone took his promises seriously, they simply don't understand the state we're in. I guess that's what they call sophistry. And both journalists and politicians are the devious masters.

Commenter

peter

Location

vietnam

Date and time

May 12, 2014, 1:22AM

@Paul Sheehan. It is a brave journalist/writer who attempts to give a 'balanced account' (presenting both sides) but who puts the most damning side first and then attempts to counter it (persuade the reader) with a thinner, more fragile argument following the first. The suggestion is that the latter is the most valid argument; an argument which should ameliorate the points of view placed first...Sorry, Paul. It didn't work.

I would have thought it better to argue whether we actually needed Abbott & Hockey to introduce an austerity budget at all (given how frightfully damaging they have been overseas, and that Australia was already ''well placed'' re: OECD?

Commenter

Jump

Date and time

May 12, 2014, 5:58AM

Thank you, Paul Sheehan.So will this budget leave us feeling glad, bad, mad or just plain sad?As for Tony Abbott - and his state of mind and motivations:Oh..Who can read another’s mind?And, what horrors might we find.Reasons for this budget fright,Some can't explain, try as might.Oh..No politician has that special skill,Not willingly take we this bitter pill.It’s so much easier to egos stroke.Than risk the wrath of gentle folk.Oh..For some, it suits to attribute malice,Others say it’s the poisoned chalice.Whatever self-serving lines we’re fed, No doubt that tough times lie ahead.

Commenter

Howe Synnott

Location

Sydney

Date and time

May 12, 2014, 6:01AM

Jump - you might have taken some positives from the article, but as a Coalition supporter it was overall pretty damning of Abbott. Some of that is justified, some of it not.

An introduction of a Labor Debt Tax would clearly be a broken promise and might trigger some ramifications for Abbott if it condemns his poll numbers to Gillard-esque proportions. Abbott seems to think that it will ultimately be seen as a welcome tax on the rich rather than a broken promise, but the evidence runs against that suggestion.

But most Australians know the budget is in a shambles - it's in both a long-term structural deficit, as well as shedding red ink on a daily basis. The Swan years must be jettisoned because the kids shouldn't have to pay for their parents largess. Let's see how Hockey juggles it.

Commenter

Hacka

Location

Canberra

Date and time

May 12, 2014, 6:20AM

All I see is a carbon copy of what has been done in Queensland. We will have to see how the works out at the next state election. But the should give Abbot at least two years for a backflip if Queensland's LNP fail at the poles.

Commenter

Mike D

Date and time

May 12, 2014, 6:22AM

None of which would matter if we were a democracy and actually had a say in these kinds of decisions. Apparently 'we the people' (to pinch an American term) are sovereign here and not the politicians. We should sack the lot of them ASAP and start again by putting a bunch of non-politicians in government.

Commenter

Cynic

Date and time

May 12, 2014, 6:29AM

Regrettably, Howe Synnott, I am empty of wordswe have been placed under a deep, dark curse, the witches are out, the demons are afootwe hide behind doors from the Wrath of Abboot

He thunders past on his steed of goldSlashing at the weak and our poor and oldHis cackling laugh is heard through the land"We must all share the pain, I have the whip hand"

Ten lashes for you, thirty lashes for themthey'll be more to come, the poor are condemnedwe will drive them out to foreign countriesand that'll take take of them nasty refugees

Commenter

Axis

Date and time

May 12, 2014, 6:58AM

Hi Paul - Gillard's Carbon tax both reduced carbon emissions and helped the revenue side of the budget, but I don't remember you using the 'but that argument trumps all' line when you were attacking her on the grounds on which you now defend Tony.

Though it may be needed, the increase in fuel tax would have to be as big a brake on the economy, or bigger, than any carbon tax. Why isn't Tony Abbott telling us that the petrol tax will run a wrecking ball through the economy? Is the economy not important now that the conservatives are in charge?

Commenter

Ross

Location

MALLABULA

Date and time

May 12, 2014, 6:59AM

Yes Tony Abbott is mad in an ideological way and has been all along. Those holding the puppet strings managed to make him look credible to the Australian voting public for just long enough. This government is fundamentally rewriting Australia. We are returning to an overtly Us and Them society. This is their first budget and I don't like what I see.

Commenter

josephine15

Date and time

May 12, 2014, 6:59AM

You just have to shake your head at the spine tingling, self interest, greedy Australians voted Tony Abbott into office on the base of very few promises and direction from "the man" himself.

Now Tony Abbott does something that affects them they don't like it.

What a bunch of sooks.

I think Tony Abbott has got it right this time with the deficit tax.

The Rich are the ones who created the Global Financial Crisis with their greed and their willingness to rip poor unfortunate people off.

The GFC was the major contributer to greater government spend, lower government revenues. Australia was very fortunate not to have the economy go into recession and have high interest rates of say 13.8% which would have effected everybody on a whole very negatively.

I think it's only fair that the rich pay their fair share to get the budget back into surplus.

I know the greedy rich won't want it this way but it's time to put back in what they helped take away.

If Tony Abbott goes through with this then I will know he is interested in getting Australia right back on track.